Illinois has no strict definition of when a divorce is high net worth, but a divorce could fit this category if the spouses have assets worth more than $1 million. Such spouses typically have high incomes, too. High net worth divorces in DuPage County, IL, are often complicated and can involve many types of businesses and properties, both domestic and foreign.
Criteria for a High Net Worth Divorce
If you and your spouse have at least $1 million in assets, you likely need a high net worth divorce attorney. Income-wise, a divorce may be high net worth if spouses’ combined gross income totals $500,000. It’s possible to have a combined gross income of $490,000 and have your divorce be treated as high net worth due to your assets. Above $500,000, divorces may have more complications due to the likelihood of more factors involved, such as multiple income streams and multiple properties.
Protecting Your Assets During a High Net Worth Divorce
A divorce attorney can advise you on protecting your assets and the various high net worth divorce dos and don’ts. Your attorneys will likely work with investigators, financial experts, and other professionals as they handle your case, too.
Since Illinois is an equitable distribution state, judges determine asset division based on what they view as equitable. They cannot punish a spouse or hold a spouse at fault for the divorce and apportion that person a smaller share of assets.
The dissipation exception may apply. Dissipation is any money spent for non-marital purposes by one or both spouses after the marriage broke down. Examples include extravagant vacations, gifts to a new romantic partner, revenge shopping purchases, and luxury vehicle purchases. The court could order the spender to reimburse the other spouse for these purchases based on the equitable distribution of assets.
What Not to Do During the Divorce Process
Among the various divorce dos and don’ts, a big mistake is attempting to hide assets. Common ways spouses hide assets include giving or selling them to a trusted person who will return them after the divorce is final, setting up a business to hide assets, and even overpaying taxes to get a large refund down the road.
Your high net worth divorce attorney can advise you on legitimate steps regarding asset protection. For example, certain estate planning strategies to keep wealth in the family or save on taxes could be fine although they may add complexity to the divorce.
What Are the Financial Implications of a High Net Worth Divorce in Illinois?
Financial matters are among the top areas of conflict in a high net worth divorce. For example, the spouses may disagree on the amounts allocated for child support or spousal maintenance. One or both parties may not want to sell a business they both own, and they must account for the tax implications in any move they make. Prenuptial agreements can come into play, too.
How Child Support Is Calculated in DuPage County, IL
The “income shares” method Illinois uses to calculate child support payments does not apply in the typical high net worth divorce. Under the income shares model, both parents’ incomes and the time they spend with the child govern which parent makes child support payments (if one does) and how much the payments are.
The narrative tends to change when one or both parents have high incomes. Judges consider factors such as the standard of living the child would have known if the parents stayed together, the needs the child has (educational resources such as private schools, tutors, and lessons, for example), each parent’s financial needs, and each parent’s income and financial resources.
Spousal Support in a High Net Worth Divorce
Spousal maintenance is a way high net worth divorce is different from traditional divorces. Typical Illinois spousal support guidelines do not always apply in high net worth situations where the spouses have combined gross incomes of more than $500,000.
Spousal support is never certain. However, in high net worth divorce proceedings, judges consider factors such as these in determining spousal maintenance:
- The length of the marriage, the standard of living during the marriage, and the spouses’ ages and health
- Each spouse’s income, property, and individual needs
- Each spouse’s earning capacity
- Whether one or both spouses spent time on domestic duties such as staying at home with the children or being present at many of the other spouse’s business functions as an expectation of the marriage, and how the time spent may have prevented a spouse from getting or furthering education, training, or employment that now affects his or her earnings or earning potential
- How much time and education one spouse would need to recover
- The contributions each spouse made to the other’s education and career
Judges also consider the tax implications that property division could have on both spouses (to keep the outcomes equitable) and any agreements the spouses may have made about maintenance.
It is common for the spouse with fewer financial resources to get a higher share of the assets in exchange for no spousal support (or in exchange for receiving less spousal maintenance). These assets the spouse gets tend to be income-producing, so the spouse has a reliable income stream.
Property Division
Many types of property may need to be split during high net worth divorce proceedings in DuPage County, IL. Common examples include real estate holdings, marital and non-marital assets, retirement accounts, investments, land trusts, revocable and irrevocable trusts (typically set up for estate planning), deferred compensation, business interests, businesses where the spouse has minority ownership, inheritances, art, and antiques.
The courts also factor in debts and liabilities, which are often complex. Judges must account for the many tax considerations and implications of the different asset types, debts, and liabilities.
Experts, such as forensic accountants and business evaluators, can be useful in such divorces. The latter analyzes business holdings, while the former works to find any assets the other spouse has hidden. Vocational experts can also lend insight into spousal maintenance issues for a spouse who does not work or who is underemployed.
Navigating Challenges in a High Net Worth Divorce
Child custody and support, asset division, business valuation, spousal maintenance, hidden assets, and international assets are some challenges inherent in many high net worth divorces. Social media, privacy, and confidentiality can come into play, too.
How Social Media Can Impact Your Divorce
Social media can affect a divorce in many ways. For example, posts and photos can serve as evidence of a lavish vacation or a pricey purchase. Posts can also expose hidden assets or financial transactions. It is also possible to challenge spousal maintenance claims with social media evidence.
A lack of privacy settings can also give various people access to your account. Even if you have strict privacy settings, someone could screenshot your posts and send them to the other party.
In cases of well-known or famous people divorcing, online harassment could occur. In all types of divorces, one of the spouses could post frequently on the other’s social media, perhaps to the point of harassment. Posts that appear to show reckless or dangerous behavior can impact child custody issues, too.
Some people turn to social media groups for support during divorces. Let your lawyer know if you are doing this, since it may not be advisable in your situation. Also, messages you share privately on social media could be hacked into, especially if you are well-known. Follow your attorney’s recommendations for communicating with loved ones.
Privacy and Confidentiality in High Net Worth Divorces
High net worth divorces often include confidentiality or nondisclosure agreements to protect sensitive information from being disclosed to the public or to third parties. The attorney-client privilege protects communications between you and your attorney, meaning discussions, emails, and documents exchanged with your attorney are confidential. They cannot be disclosed without your consent.
While divorce court proceedings are generally public, high net worth cases can involve sealing certain documents, holding hearings in private, and requesting that sensitive financial information be kept confidential. For even more privacy in lieu of typical courtroom proceedings, many parties opt for mediation, arbitration, or other alternative dispute resolution methods.
Media and public scrutiny may be high, but your attorney will advise you on what to do. Your team should have a strategy to manage public perception and give you as much privacy as possible. You may need to seek restraining orders or protective orders to prevent the unauthorized release of sensitive information.
Financially speaking, both parties must make extensive disclosures about assets, income, debts, and expenses. It’s crucial to provide accurate information. Working with professionals who specialize in high-asset divorces is common. They are familiar with the challenges you face and can help you protect your privacy.
